{"id":303,"date":"2022-02-18T00:00:00","date_gmt":"2022-02-18T00:00:00","guid":{"rendered":"https:\/\/www.versaclouderp.com\/blog\/easy-guide-how-to-distribute-freight-costs-and-other-landed-costs-for-products\/"},"modified":"2022-02-18T00:00:00","modified_gmt":"2022-02-18T00:00:00","slug":"easy-guide-how-to-distribute-freight-costs-and-other-landed-costs-for-products","status":"publish","type":"post","link":"https:\/\/www.versaclouderp.com\/blog\/easy-guide-how-to-distribute-freight-costs-and-other-landed-costs-for-products\/","title":{"rendered":"Easy guide on How to distribute freight costs and other landed costs for products"},"content":{"rendered":"<h2>What are freight costs and other landed costs for products?<\/h2>\n<p>Freight costs and landed costs are commonplace for all types of businesses, especially for inventory-heavy businesses.<\/p>\n<p>Freight cost is typically the cost of delivering goods from one point to another. Landed cost is the price of the product when it reaches a supplier. Landed costs generally include:<\/p>\n<ul>\n<li>Cost of the product<\/li>\n<li>Transportation fee<\/li>\n<li>Taxes&amp;Tariffs<\/li>\n<li>Insurance<\/li>\n<li>Handling and other such charges<\/li>\n<\/ul>\n<p><b>[widget id=&#8221;custom_html-21&#8243;]<\/b><\/p>\n<h2>How to attribute freight costs and other landed costs to your Inventory?<\/h2>\n<p>If in your business you have costs related to the acquisition of inventory and you want to attribute it as the landed cost to your inventory. Versa Cloud ERP has an easy step-by-step workflow to guide you.<\/p>\n<p>A common scenario is that you have freight costs and\/or other costs related to shipments related to incoming shipments. And you want to record that as the cost of your inventoried products.<\/p>\n<p>The freight cost is for multiple shipments, it would be hard to separate the cost by each product in the shipments. But if you have any other cost that you want to attribute to the inventoried products, the method described in this article applies.<\/p>\n<p><b>[widget id=&#8221;custom_html-24&#8243;]<\/b><\/p>\n<h2>Versa Cloud ERP&#8217;s step by step guide for attributing freight costs and landed costs<\/h2>\n<p>Versa Cloud ERP allows you to relate bill items to incoming shipment receipts and record the cost of acquiring the products.<\/p>\n<p>A user needs to first activate the setting called <strong>Allocate Bill Item Costs to Shipment Receipts in Setup, Feature Setting<\/strong>.<\/p>\n<p>Post turning the setting on when a user records a billing item (example: a bill coming from your freight carriers), a user can pick one or more related shipment receipts the cost is associated with. <span class=\"landing-page-changedText-0-2-17\">In<\/span><span class=\"\">\u00a0<\/span><span class=\"landing-page-changedText-0-2-17\">order<\/span><span class=\"\">\u00a0<\/span><span class=\"landing-page-changedText-0-2-17\">to increase\u00a0<\/span><span class=\"\">the\u00a0<\/span><span class=\"landing-page-changedText-0-2-17\">cost<\/span><span class=\"\">\u00a0<\/span><span class=\"landing-page-changedText-0-2-17\">of<\/span><span class=\"\">\u00a0<\/span><span class=\"landing-page-changedText-0-2-17\">the<\/span><span class=\"\">\u00a0<\/span><span class=\"landing-page-changedText-0-2-17\">products<\/span><span class=\"\">, the expenses will\u00a0<\/span><span class=\"landing-page-changedText-0-2-17\">no<\/span><span class=\"\">\u00a0<\/span><span class=\"landing-page-changedText-0-2-17\">longer\u00a0<\/span><span class=\"\">be\u00a0<\/span><span class=\"landing-page-changedText-0-2-17\">added<\/span><span class=\"\"> to the expense account <\/span><span class=\"landing-page-changedText-0-2-17\">when<\/span><span class=\"\">\u00a0<\/span><span class=\"landing-page-changedText-0-2-17\">the<\/span><span class=\"\">\u00a0<\/span><span class=\"landing-page-changedText-0-2-17\">shipment<\/span><span class=\"\">\u00a0<\/span><span class=\"landing-page-changedText-0-2-17\">receipt<\/span><span class=\"\">\u00a0<\/span><span class=\"landing-page-changedText-0-2-17\">is<\/span><span class=\"\">\u00a0<\/span><span class=\"landing-page-changedText-0-2-17\">picked,<\/span><span class=\"\">\u00a0<\/span><span class=\"landing-page-changedText-0-2-17\">but<\/span><span class=\"\">\u00a0<\/span><span class=\"landing-page-changedText-0-2-17\">rather<\/span><span class=\"\">\u00a0<\/span><span class=\"\">to the\u00a0<\/span><span class=\"\">asset sub-account for the products on the shipment\u00a0<\/span><span class=\"landing-page-changedText-0-2-17\">receipt<\/span><span class=\"\">.\u00a0\u00a0<\/span><\/p>\n<h4>The result GL entry would be a debit inventory asset account for the product and credit accounts payable.<\/h4>\n<p><span class=\"landing-page-changedText-0-2-17\">The<\/span><span class=\"\">\u00a0FIFO<\/span><span class=\"\">\u00a0<\/span><span class=\"landing-page-changedText-0-2-17\">system<\/span><span class=\"\">\u00a0<\/span><span class=\"landing-page-changedText-0-2-17\">creates<\/span><span class=\"\">\u00a0a\u00a0<\/span><span class=\"landing-page-changedText-0-2-17\">new<\/span><span class=\"\">\u00a0<\/span><span class=\"landing-page-changedText-0-2-17\">bucket<\/span><span class=\"\">\u00a0<\/span><span class=\"landing-page-changedText-0-2-17\">for<\/span><span class=\"\">\u00a0<\/span><span class=\"landing-page-changedText-0-2-17\">every<\/span><span class=\"\">\u00a0<\/span><span class=\"landing-page-changedText-0-2-17\">shipment<\/span><span class=\"\">\u00a0<\/span><span class=\"landing-page-changedText-0-2-17\">receipt<\/span><span class=\"\">\u00a0<\/span><span class=\"\">for each product received.\u00a0<\/span><\/p>\n<p><span class=\"\">After the bill with the freight\u00a0<\/span><span class=\"landing-page-changedText-0-2-17\">costs<\/span><span class=\"\">\u00a0<\/span><span class=\"landing-page-changedText-0-2-17\">is<\/span><span class=\"\">\u00a0posted, the FIFO bucket created for the shipment receipts\u00a0<\/span><span class=\"landing-page-changedText-0-2-17\">is<\/span><span class=\"\">\u00a0<\/span><span class=\"\">updated.<\/span><\/p>\n<p>You can view the cost for a FIFO bucket by searching for the product under Search Inventoried Products. And then view the FIFO cost information by clicking on the quantity under On Hand. The on-hand view shows you all the current FIFO buckets created for a product. Click on the number under Value to view more details. You will be able to see the new cost (posted due to the bill) reflected in the on-hand view.<\/p>\n<p><span class=\"\">When multiple shipment receipts are chosen, the\u00a0<\/span><span class=\"\">bill line\u00a0<\/span><span class=\"landing-page-changedText-0-2-17\">cost\u00a0<\/span><span class=\"\">is distributed\u00a0<\/span><span class=\"landing-page-changedText-0-2-17\">proportionately\u00a0<\/span><span class=\"\">to the shipment receipts\u00a0<\/span><span class=\"landing-page-changedText-0-2-17\">based<\/span><span class=\"\">\u00a0<\/span><span class=\"landing-page-changedText-0-2-17\">on<\/span><span class=\"\">\u00a0<\/span><span class=\"\">the\u00a0<\/span><span class=\"landing-page-changedText-0-2-17\">amount<\/span><span class=\"\">\u00a0of the\u00a0<\/span><span class=\"landing-page-changedText-0-2-17\">item<\/span><span class=\"\">\u00a0<\/span><span class=\"landing-page-changedText-0-2-17\">purchased<\/span><span class=\"\">\u00a0(quantity x unit costs on POs).<\/span><\/p>\n<p><span class=\"landing-page-changedText-0-2-17\">Furthermore<\/span><span class=\"\">,\u00a0<\/span><span class=\"landing-page-changedText-0-2-17\">in<\/span><span class=\"\">\u00a0<\/span><span class=\"landing-page-changedText-0-2-17\">the event that\u00a0<\/span><span class=\"\">a shipment receipt contains multiple lines for multiple products, the amount to attribute to each line and for each product is further distributed proportionally based on the value\u00a0<\/span><span class=\"landing-page-changedText-0-2-17\">of<\/span><span class=\"\">\u00a0each line.<\/span><\/p>\n<p><span class=\"\">In a scenario where some\u00a0<\/span><span class=\"\">products are sold or shipped before the freight bill is posted, the application would <\/span><span class=\"\">identify <\/span><span class=\"landing-page-changedText-0-2-17\">those<\/span><span class=\"\">\u00a0<\/span><span class=\"landing-page-changedText-0-2-17\">products\u00a0<\/span><span class=\"\">that\u00a0<\/span><span class=\"landing-page-changedText-0-2-17\">have<\/span><span class=\"\">\u00a0<\/span><span class=\"landing-page-changedText-0-2-17\">been\u00a0<\/span><span class=\"\">sold\u00a0<\/span><span class=\"landing-page-changedText-0-2-17\">versus<\/span><span class=\"\">\u00a0<\/span><span class=\"landing-page-changedText-0-2-17\">those<\/span><span class=\"\">\u00a0<\/span><span class=\"landing-page-changedText-0-2-17\">that are\u00a0<\/span><span class=\"\">still in inventory. <\/span><span class=\"landing-page-changedText-0-2-17\">The<\/span><span class=\"\">\u00a0<\/span><span class=\"landing-page-changedText-0-2-17\">cost of\u00a0<\/span><span class=\"\">units that are sold<\/span><span class=\"\">\u00a0<\/span><span class=\"\">is posted to the COGS expense account for the product. For units\u00a0<\/span><span class=\"\">in inventory, the cost is posted to the inventory asset account as described above.<\/span><\/p>\n<p><b>[widget id=&#8221;custom_html-40&#8243;]<\/b><\/p>\n<p><b>[widget id=&#8221;custom_html-30&#8243;]<\/b><\/p>\n<p><strong>Do Business on the Move!\u00a0<\/strong><\/p>\n<p><span style=\"font-weight: 400;\">Make your businesses hassle-free and cut the heavyweights <a href=\"https:\/\/www.versaclouderp.com\/versa-cloud-erp-tour\/\"><strong>sign up for the Versa Cloud ERP today!!<\/strong><\/a><\/span><\/p>\n<p><strong>Join our <a href=\"https:\/\/www.versaclouderp.com\/pricing#Compare-eCommerce-Edition-&amp;-Standard-Edition\">Versa<\/a> Community and be Future-ready with us.\u00a0<\/strong><\/p>\n<p><b>[widget id=&#8221;custom_html-20&#8243;]<\/b><\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"What are freight costs and other landed costs for products? Freight costs and landed costs are commonplace for&hellip;","protected":false},"author":2,"featured_media":702,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"content-type":"","vcerp_display_header_overlay":false,"vcerp_singular_sidebar":"","vcerp_page_header_type":"","footnotes":""},"categories":[3],"tags":[33,20,876,492,418,136,34,878,102,879,185,192],"class_list":{"0":"post-303","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-supply-chain-and-logistics-optimization","8":"tag-cloud-based-erp","9":"tag-cloud-erp","10":"tag-cloud-erp-for-ecommerce","11":"tag-customization","12":"tag-e-commerce","13":"tag-enterprise-resource-planning","14":"tag-erp","15":"tag-erp-for-ecommerce","16":"tag-erp-solution","17":"tag-shopify-erp","18":"tag-small-business","19":"tag-user-friendly","20":"cs-entry"},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v24.0 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Easy guide on How to distribute freight costs and other landed costs for products - Versa Cloud ERP - Blog<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.versaclouderp.com\/blog\/easy-guide-how-to-distribute-freight-costs-and-other-landed-costs-for-products\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Easy guide on How to distribute freight costs and other landed costs for products - Versa Cloud ERP - Blog\" \/>\n<meta property=\"og:description\" content=\"What are freight costs and other landed costs for products? Freight costs and landed costs are commonplace for&hellip;\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.versaclouderp.com\/blog\/easy-guide-how-to-distribute-freight-costs-and-other-landed-costs-for-products\/\" \/>\n<meta property=\"og:site_name\" content=\"Versa Cloud ERP - Blog\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/versaclouderp\" \/>\n<meta property=\"article:published_time\" content=\"2022-02-18T00:00:00+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.versaclouderp.com\/blog\/wp-content\/uploads\/2024\/11\/81.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1920\" \/>\n\t<meta property=\"og:image:height\" content=\"1080\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Sanjana Gujral\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@versaclouderp\" \/>\n<meta name=\"twitter:site\" content=\"@versaclouderp\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Sanjana Gujral\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.versaclouderp.com\/blog\/easy-guide-how-to-distribute-freight-costs-and-other-landed-costs-for-products\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.versaclouderp.com\/blog\/easy-guide-how-to-distribute-freight-costs-and-other-landed-costs-for-products\/\"},\"author\":{\"name\":\"Sanjana Gujral\",\"@id\":\"https:\/\/www.versaclouderp.com\/blog\/#\/schema\/person\/0ab2da39b28bdf5f47b2d08ae86841de\"},\"headline\":\"Easy guide on How to distribute freight costs and other landed costs for products\",\"datePublished\":\"2022-02-18T00:00:00+00:00\",\"dateModified\":\"2022-02-18T00:00:00+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/www.versaclouderp.com\/blog\/easy-guide-how-to-distribute-freight-costs-and-other-landed-costs-for-products\/\"},\"wordCount\":653,\"commentCount\":0,\"publisher\":{\"@id\":\"https:\/\/www.versaclouderp.com\/blog\/#organization\"},\"image\":{\"@id\":\"https:\/\/www.versaclouderp.com\/blog\/easy-guide-how-to-distribute-freight-costs-and-other-landed-costs-for-products\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.versaclouderp.com\/blog\/wp-content\/uploads\/2024\/11\/81.jpg\",\"keywords\":[\"cloud based erp\",\"Cloud ERP\",\"cloud erp for ecommerce\",\"customization\",\"e-commerce\",\"enterprise resource planning\",\"ERP\",\"erp for ecommerce\",\"erp solution\",\"shopify erp\",\"small business\",\"user friendly\"],\"articleSection\":[\"Supply Chain &amp; Logistics Optimization\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/www.versaclouderp.com\/blog\/easy-guide-how-to-distribute-freight-costs-and-other-landed-costs-for-products\/#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.versaclouderp.com\/blog\/easy-guide-how-to-distribute-freight-costs-and-other-landed-costs-for-products\/\",\"url\":\"https:\/\/www.versaclouderp.com\/blog\/easy-guide-how-to-distribute-freight-costs-and-other-landed-costs-for-products\/\",\"name\":\"Easy guide on How to distribute freight costs and other landed costs for products - 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